PART 8-8-TERMINATION OF CONTRACTS

Subpart 8-8.2-General Principles Applicable to the Termination for Convenience and Settlement of Fixed-Price and Cost-Reimbursement Type Contracts

Sec.

8-8.200 Scope of subpart.

8-8.206 Fraud or other criminal conduct. 8-8.207 Accounting review of prime contract settlement proposals and of subcontract settlements.

8-8.211 Review and approval of proposed settlements.

8-8.211-1 Settlement review boards. 8-8.211-2 Required review and approval.

Subpart 8-8.6—Termination for Default 8-8.602-6 Repurchase against contractor's account.

Subpart 8-8.7-Clauses

8-8.700 Scope and applicability of subpart. 8-8.700-1 Scope.

8-8.700-2 Applicability.

AUTHORITY: Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C. 486(c); sec. 210(c), 72 Stat. 1114, 38 U.S.C. 210(c).

Subpart 8-8.2-General Principles Applicable to the Termination for Convenience and Settlement of Fixed-Price and Cost-Reimbursement Type Contracts

§ 8-8.200 Scope of subpart.

This subpart prescribes actions to be taken by contracting officers, when settlement proposals are received from contractors whose contracts have been terminated for the convenience of the Government.

[33 FR 14701, Oct. 2, 1968]

§ 8-8.206 Fraud or other criminal conduct. When the circumstances set forth in FPR 1-8.206 are encountered, the contracting officer will immediately discontinue all negotiations. He/she will submit to the Assistant Administrator for Supply Services, all of the pertinent facts necessary to support his/ her reasoning. The Assistant Administrator for Supply Services will review the submission and fully develop the facts. If he/she concurs that the evidence indicates fraud or other crimi

nal conduct, he/she will forward the submission with his/her recommendations, through channels, to the General Counsel for a determination as to whether submission to the Department of Justice for criminal or civil action is indicated. The contracting officer will be advised by the Assistant Administrator for Supply Services as to any further action to be taken by him/her. Pending receipt of this advice, the matter will not be discussed with the contractor. If inquiry is made by the contractor, he/she will be advised only that his/her proposal has been forwarded to higher authority.

[46 FR 26643, May 14, 1981]

§ 8-8.207 Accounting review of prime contract settlement proposals and of subcontract settlements.

Contracting officers will submit settlement proposals to the Assistant Inspector General for Audit (52C), for review and audit prior to taking any further action, in accordance with the provisions and claim limitations applicable to prime and subcontractors as set forth in FPR 1-8.207.

[46 FR 26644, May 14, 1981]

§ 8-8.211 Review and approval of proposed settlements.

for

§ 8-8.211-1 Settlement review boards. The Assistant Administrator Supply Services and the Assistant Administrator for Construction will each establish within his/her own organization a settlement review board. These boards will be established in accordance with the provisions for FPR 18.211-1 for the purpose of reviewing proposed settlements of contracts that have been terminated for the convenience of the Veterans Administration. [46 FR 26644, May 14, 1981]

§ 8-8.211-2 Required review and approval. (a) When a review of a proposed settlement is required by FPR 1-8.211-2 and the contract covers supplies, equipment or services, other than construction chargeable to Construction Appropriations, the contracting officer will submit the proposed settlement or

(b) When the contract covers construction chargeable to Construction Appropriations and review is required, the proposed settlement or determination will be submitted by the contracting officer to the settlement review board through the Assistant Administrator for Construction.

(c) Each submission shall, in addition to the material required by FPR 1-8.211-2(c), be accompanied by any other relevant material that will assist the board in arriving at a decision to approve or disapprove the proposal.

[33 FR 14701, Oct. 2, 1968, as amended at 45 FR 7815, Feb. 5, 1980; 46 FR 26644, May 14, 1981]

Subpart 8-8.6-Termination for Default

§ 8-8.602-6 Repurchase against contractor's account.

(a) VA Form 07-2237, Request, Turnin, and Receipt for Property or Services, or the file copy of the purchase order covering the purchase of supplies, equipment or services against a defaulting contractor shall be annotated to show the name of the defaulted contractor, the contract number, the contract price, the name of the contractor from whom procurement is made, the price paid, the competition secured and the difference in cost, if any, to the Veterans Administration. When reprocurement results in the payment of excess costs, and the purchase is made through the Supply Fund, the excess costs when collected shall be deposited to the credit of the Supply Fund. In all other instances the excess costs, when collected, shall be deposited to General Fund Receipts.

(b) Contracting Officers, when purchasing against a defaulted contractor, shall procure the items in a manner that will protect the interests of the contractor as well as those of the Government.

[31 FR 7687, May 28, 1966]

Subpart 8-8.7—Clauses

SOURCE: 34 FR 6730, Apr. 22, 1969, unless otherwise noted.

§ 8-8.700 Scope and applicability of subpart.

§ 8-8.700-1 Scope.

This subpart prescribes the termination clauses to be used by the Veterans Administration in fixed-price and certain cost-reimbursement type contracts.

§ 8-8.700-2 Applicability.

(a) Formally advertised or negotiated fixed-price contracts for supplies and/or equipment will include the following clauses, as applicable:

(1) The long-form termination for convenience clause set forth in FPR 18.701 and the termination for default clause set forth in FPR 1-8.707 will be included in contracts estimated to exceed $100,000.

(2) The short-form termination for convenience clause set forth in FPR 18.705-1 and the termination for default clause set forth in FPR 1-8.707 will normally be included in contracts estimated to cost more than $2,500 but not more than $100,000. However, the long-form termination for convenience clause in FPR 1-8.701 may be used for contracts in this price range when the long-form clause is included in preprinted supplemental conditions.

(b) Formally advertised or negotiated fixed-price contracts for nonpersonal services (excluding construction) estimated to exceed $2,500 may inIclude the short-form termination for convenience clause set forth in FPR 18.705-1, whenever it is determined that a termination for convenience clause is both advisable and desirable for use of the Government and a claim will not be made in the event of termination for the convenience of the Government. If these conditions do not exist, and it is the desire of both parties to have the right to terminate the contract, a mutual termination clause as provided in paragraph (i)(2) of this section may be included. In other cases a special termination clause, designed to meet the specific require

ments of the contract, may be included as provided in paragraph (i)(1) of this section. Service contracts will normally include the termination for default clause set forth in FPR 1-8.707 (Article 11, Standard Form 32, General Provisions, Supply Contracts). However, when this clause is clearly not appropriate for the services being acquired, it may be eliminated, revised or replaced with a special or mutual termination clause as provided in paragraph (i) of this section.

(c) Formally advertised or negotiated fixed-price contracts for construction will include the following clauses, as applicable:

(1) The long-form termination for convenience clause set forth in FPR 18.703 and the long-form termination for default clause set forth in FPR 18.709-1 will be included in contracts estimated to exceed $10,000.

(2) The short-form termination for default clause set forth in FPR 18.709-2 will be included in contracts not exceeding $10,000. At the option of the contracting officer, the short-form termination for convenience clause set forth in FPR 1-8.705-2 may be included.

(d) Formally advertised or negotiated fixed-price contracts in excess of $2,500 for experimental, developmental, or research work where a profit is contemplated will include the longform termination for convenience clause set forth in FPR 1-8.701. However, if the contract is for services and it is determined that the successful bidder will not have incurred substantial charges in preparation for and carrying out the contract, the short-form termination for convenience clause set forth in FPR 1-8.705-1 may be used instead. When it is advisable to provide for termination for default, contracts of this type will also include the clause set forth in FPR 1-8.710.

(e) Fixed-price contracts for experimental, developmental or research work placed with an educational or nonprofit institution on a no-fee or noprofit basis will contain the termination for convenience clause set forth in FPR 1-8.704-1. A termination for default clause is not required.

(f) Cost-reimbursement type contracts for experimental, developmen

tal, or research work placed with an educational or nonprofit institution on a no-fee or no-profit basis will include the termination for convenience clause set forth in FPR 1-8.704-1, whenever the contracting officer considers a termination clause is necessary or advisable. A termination for default clause is not required.

(g) Cost-reimbursement type contracts for (1) supplies and/or equipment or (2) experimental, developmental or research work where a fee is contemplated will include the termination for default or for convenience clause as set forth in FPR 1-8.702, whenever the contracting officer considers a termination clause is necessary or advisable. When this termination clause is used, an excusable delays clause substantially as set forth in FPR 1-8.708 will be included.

(h) Cost-reimbursement type construction contracts in excess of $10,000 will include the termination for default or for convenience clause set forth in FPR 1-8.702, modified as provided in FPR 1-8.700-2(a)(3). tracts of this type will also include the excusable delays clause substantially as set forth in FPR 1-8.708.

Con

(i) Special or mutual termination clauses may be used in service contracts for which no clauses are prescribed in this subpart.

(1) When required or advisable, a special clause will be developed to meet the needs of the specific contract, such as procurement from a sole source for utility services, medical specialist services, medical resources, etc.

(2) When a mutual termination clause is appropriate, it will be substantially as follows:

This contract will remain in force during the period stated, unless terminated at the request of either party after thirty (30) days notice in writing. To the extent that this contract is so terminated, the Veterans Administration will be liable only for payment in accordance with the payment provisions of this contract for services rendered prior to the effective date of termination.

ing out of, or in any way connected with the performance of work under this agreement. Further, it is agreed that any negligence or alleged negligence of the Government, its officers, agents, servants, and employees, shall not be a bar to a claim for indemnification unless the act or omission of the Government, its officers, agents, servants, and employees is the sole, competent, and producing cause of such claims, loss, damage, injury, and liability. At the option of the contractor, and subject to the approval by the Contracting Officer of the sources, insurance coverage may be employed as guaranty of indemnification.

(b) Insurance. Satisfactory insurance coverage is a condition precedent to award of a contract. In general, a successful bidder must present satisfactory evidence of full compliance with State and local requirements, or those below stipulated, whichever are the greater. More specifically, workman's compensation and employer's liability coverage will conform to applicable State law requirements for the service contemplated, whereas general liability and automobile liability of comprehensive type, shall in the absence of higher statutory minimums, be required in the amounts per vehicle used of not less than $100,000 per person and $500,000 per accident, the corresponding property damage liability insurance coverage (comprehensive automobile liability policy) to be not less than $10,000. State approved sources of insurance coverage ordinarily will be deemed acceptable to the Veterans Administration installation, subject to timely certifications by such sources of the types and limits of the coverages afforded by the sources to the bidder. (In those instances where airplane ambulance service is to be used, substitute the word "aircraft" for "automobile" and "vehicle" and modify coverage to require passenger liability insurance of $100,000 per passenger and $500,000 per accident, an aircraft public liability insurance of $100,000 per person and $500,000 per accident, the corresponding property damage liability insurance coverage (comprehensive aircraft liability policy) to be not less than $50,000 per accident).

(c) Exceptions. The provisions of this section do not apply to:

(1) Emergency or sporadic ambulance service authorized by VA Manual MP-1, part II, chapter 3: Provided, That such service is not used solely for the purpose of avoiding entering into a continuing contract. Provided further, That such services will be obtained from firms known to carry insurance coverage in accordance with State or local requirements.

(2) Contracts for limousine or taxi service: Provided, That such limousines or taxis are used to transport ambulatory beneficiaries, and are not equipped for and used in lieu of ambulance service.

(d) Contracts for limousine and taxi service. Contracts for limousine and taxi service must contain provisions for insurance coverage in accordance with State or local requirements.

[31 FR 7688, May 28, 1966, as amended at 31 FR 16200, Dec. 17, 1966; 38 FR 10006, Apr. 23, 1973]

Subpart 8-10.50-Performance and Payment Bonds

§ 8-10.5002 Bond premium adjustment. When Performance and Payment Bonds are required the contract will contain the following clause:

Bond Premium Adjustment

When net changes in original contract price affect the premium of a Corporate Surety Bond by $5 or more, the Government in determining basis for final settlement, will provide for bond premium adjustment computed at the rate shown in the bond.

[28 FR 2343, Mar. 12, 1963]

Subpart 8-10.51-Indemnification of Contractors, Medical Research or Development Contracts

SOURCE: 31 FR 7688, May 28, 1966, unless otherwise noted.

§ 8-10.5100 Scope of subpart.

(a) This subpart sets forth the policies and procedures concerning indemnification of contractors performing contracts which involve a risk of an unusually hazardous nature, covering